WRAPUP 1-China sells gasoline to Iran, but sanctions loom

* Chinese state companies resume gasoline shipments to Iran

* Iran reliant on gasoline imports

* Western nations push for "swift, bold" sanctions

By Luke Pachymuthu and Seng Li Peng

DUBAI/SINGAPORE, April 14 (Reuters) - A Chinese state oil company has sold two cargoes of gasoline to Iran, industry sources said on Wednesday, underlying Beijing's distaste for any sanctions on Tehran that could damage economic ties.

China's stance on Iran has become vital as Russia has hardened its position and moved closer to the other members of the United Nations Security Council, the United States and its European allies, which are pressing for swift, bold sanctions.

China agreed at a nuclear summit in Washington this week to help negotiate a new U.N. sanctions resolution on Iran, but stressed the need for a diplomatic solution and that any sanctions should not hurt trade, nor the Iranian people.

"The Chinese are obviously concerned about what ramifications this might have on the economy generally," President Barack Obama said on Tuesday. "Iran is an oil-producing state"

The United States and major European powers believe Iran is attempting to secretly build an atomic arsenal under the cover of a civilian nuclear programme that Tehran insists is entirely peaceful. Iran has already defied three sets of U.N. sanctions.

U.S. intelligence agencies believe Iran will not be capable of producing nuclear weapons for at least a year, but may be technically able to do so within 3-to-5 years.

While Western states have had to dilute their demands for sanctions to exclude energy deals, the United States may impose unilateral sanctions on fuel suppliers to Iran. As a result, several of the world's top oil suppliers have already curbed sales to Iran to pre-empt penalisation of their U.S. operations.

But state-run Chinaoil appeared undeterred, selling a total of about 600,000 barrels of gasoline worth around $55 million to the Islamic Republic, the industry sources said.

The cargoes were Chinaoil's first direct sales to Iran since at least January 2009, according to Reuters data. Chinese firms have previously sold through intermediaries, traders said.

"As long as there is money to be made, and economic benefits to be taken advantage off, Iran will always find ready sellers of gasoline from the international market," a trader said. "The politicians don't understand markets ...sanctions are cosmetic."

While Iran is the world's fifth biggest crude oil exporter, U.S. sanctions mean it has suffered from lack of investment in refineries so that it now has to import some 40 percent of its gasoline needs to meet the demand of a population brought up to believe that cheap fuel is its birthright.

Another Chinese company, Sinopec, is also poised to sell gasoline to Iran for the first time in six years, trade sources said, and Iran appeared confident it could weather any storm.

"We have no problem to meet the country's petroleum demand ... We are familiar with sanctions and sanctions will have no impact on our oil industry," the SHANA news agency quoted Oil Minister Masoud Mirkazemi as saying on Wednesday.

The moves by Chinese firms come after LUKOIL, Russia's No. 2 oil company, stopped gasoline sales to Iran this month.

In March, Anglo-Dutch oil firm Royal Dutch Shell (RDSa.L) announced it had stopped gasoline supplies to the Islamic Republic, joining two of the world's largest independent trading companies Glencore and Vitol who had taken similar decisions.

German carmaker Daimler (DAIGn.DE) on Wednesday joined a growing list of companies stopping trade with Iran due to threats to its business in the United States. [ID:nLDE62A19L]

Mehdi Varzi, a London-based energy consultant, said sanctions had already had a "big impact" on Iran, but curbing investment and therefore productivity in its crucial oil sector.

Iran's growing isolation means Tehran is ever more reliant on China, for both trade and investment and for diplomatic backing on the international stage. But Iran, analysts point out, has little or no leverage over China in order to keep that support other than offering ever sweeter deals.

China's imports of Iranian crude shrank by nearly 40 percent in the first two months of 2010, compared to the same time last year, Chinese customs data showed, despite the Asian economy's expanding hunger for foreign oil.

Obama wants to see the Security Council "move forward boldly and quickly" towards a new round of sanctions.

"I think that we have a strong number of countries on the Security Council who believe this is the right thing to do. But I think these negotiations can be difficult and I am going to push as hard as I can," he said on Tuesday.

-- For a factbox on Iran's crude export and fuel import customers, click [ID:nLDE63A011]

-- For stories on political developments in Iran, click on [ID:nLDE5BD2ES] (Additional reporting by Parisa Hafezi and Robin Pomeroy in Tehran, and Fredrik Dahl in Dubai; Writing by Jon Hemming; Editing by Dominic Evans) (Tehran newsroom,+98 21 8820 8770)